How Market Volatility Has Impacted Morgan Stanley's Wealth Offering
Last year’s December stock market volatility kept flat Morgan Stanley’s wealth management unit’s revenues for 2019’s first quarter when compared to the same period the previous year. Those revenues were $4.4 billion, according to the company’s 2019 first quarter earnings report, released April 17.
But the company earned a pre-tax profit during the quarter of $1.2 billion, up 18% from the previous quarter, and 2% from the same period last year.
The wirehouse’s financial advisor roster grew only slightly to 15,708, gaining no more than 14 additional FAs from the previous quarter and 26 from the same period in 2018.
And don’t expect that roster to start bulging from any aggressive recruiting campaign. Jonathan Pruzan, Morgan Stanley’s CFO, stressed during an earnings call that the firm has not aggressively recruited FAs and will likely not do so in the near future.
“There has been less movement of people and that’s positive,” Pruzan said. “Recruiting was quite slow for us last year,” he added. “Less movement of people broadly speaking is better. We feel very good about the stability of where we are right now,” Pruzan explained.
But even without sustained FA recruiting, Morgan Stanley expects to reach new clients through the additional channels it will gain as a result of its previously-announced $900 million acquisition of Solium Capital, a stock plan administrator which has 3,000 stock plan clients with a million participants.
The Solium acquisition gives Morgan Stanley not only access to workplace clients, but also additional technology for reaching millennial prospects through online channels prior to their need for full-service advisory services, James Gorman, Morgan Stanley’s CEO, told analysts during the earnings call.
The deal helps Morgan Stanley with its goals of “buying tech and giving us access to new channels,” Gorman said.